Key facts
- Tracey Gunnlaugsson, Exxon Mobil's head of global trading, is retiring.
- Gunnlaugsson was appointed to lead the trading division in 2023.
- Exxon reported a $3.9 billion paper loss from derivatives in the first quarter.
- The company's net income reached its lowest point in five years.
- Exxon's CFO indicated that timing impacts are expected to lead to future profitability.
Exxon Mobil's head of global trading, Tracey Gunnlaugsson, is retiring, according to sources familiar with the matter. Gunnlaugsson, who took the helm of the trading division in 2023, is based in Houston.
Exxon has faced challenges with trading-related "timing losses," despite elevated oil prices stemming from the Middle East conflict. In the first quarter, the company reported a $3.9 billion paper loss from derivatives, which contributed to its net income falling to a five-year low. This contrasts with European oil majors, which reported significant trading profits during the same period.
Unlike European counterparts who have extensive trading desks, Exxon and competitor Chevron primarily focus on optimizing their internal supply chains. While this approach prioritizes predictability, it can limit opportunities to profit from significant market fluctuations. Exxon utilizes financial derivatives to hedge against price changes during cargo delivery, and the company has stated that the value of physical shipments is not recognized in earnings until completion, leading to unfavorable timing impacts.
Exxon's CFO, Neil Hansen, indicated in a recent interview that these timing impacts are anticipated to reverse in subsequent quarters, leading to profitability. CEO Darren Woods echoed this sentiment, expressing confidence that the losses represent a temporary timing issue that will naturally resolve.